Central Bank policymakers discuss evolving cash landscape in Washington; cash use at POS declines

Central Bank Policy in an Evolving Cash LandscapeKeynote speech at the Banknote Conference

1 Introduction: From Monument to Money

It is a privilege to address such a distinguished gathering here in Washington. A city of powerful institutions and enduring symbols.

Just a short distance from here stands one of them: the Washington Monument. Today, we see it as a completed landmark – a towering symbol of American history with global reach, admired by millions of visitors every year. Yet behind this impressive presence lies a long and sometimes difficult construction history, with interruptions and delays stretching over decades. In this sense, its story is also a lesson in perseverance and public responsibility.

The idea to honour George Washington dates back to the 1780s. But for decades progress stalled. When construction finally began in 1848, it soon ran into trouble: funding dried up, political disputes erupted, and by 1854 work stopped. For more than twenty years, a half-finished stump stood on this ground – a monument to good intentions without follow-through. Only when the federal government stepped in, strengthened the foundations and provided stable funding was the monument completed in the 1880s. And even since then, it has not been a “set and forget” structure. Earthquakes, storms and the effects of time have required repeated repairs and modernisation – including the elevator.

The Washington Monument reminds us: even the most impressive structures need solid foundations and ongoing stewardship. The same is true for our payment systems – complex architectures of rules, infrastructure and trust. They cannot be built once and left alone. They require solid foundations, continuous maintenance and, at times, decisive public action.

So let me shift perspective.Imagine our payment system as a high-rise building: digital payments are the elevators, and cash is the staircase – a fundamental part of the design, indispensable when things go wrong. And let’s be honest: some of us simply feel more comfortable on the stairs – no matter how fancy the elevator is.

2 Inside the High-Rise: How We Pay Today

With that image in mind, let us step inside and watch people move from floor to floor. Most take the elevators –our digital payments: cards, mobile wallets, e-payment methods. In many countries, they are now the default way to navigate the building.

The staircase, by contrast, is used less. This is cash at the point of sale. In advanced economies its share has been declining for years.

In Germany, about 51 % of transactions are made in cash, down from 58 % in 2021—and the share continues to decline.Yet the building is not emptying. More people keep their place inside –holding cash as a store of value –even as they climb the stairs less for everyday payments. Cash is not disappearing; only the way it is used is changing: an observation also referred to as the “banknote paradox”.

But even this picture is starting to shift: in many countries, cash in circulation is now falling relative to the size of the economy, suggesting that its future role as a store of value may be less certain than it once seemed. This shift shapes how we must design and safeguard payments. As more people rely on elevators, management optimises: staircases narrow, doors are harder to find, lights are dimmed.

In economic terms: with less cash use at the point of sale, cash infrastructure shrinks, acceptance becomes patchier and unit costs rise. A downward spiral could follow: the staircase grows harder to find and less convenient, so fewer use it; declining usage and acceptance lead to further cuts; higher costs make maintenance even less attractive.

Meanwhile, the elevators change, too. They grow faster, carry more people and are often operated by global players headquartered far from this building. They are extremely efficient –but also highly interconnected, dependent on electricity, networks and complexIT.

From the lobby, everything looks impressive and efficient. In the control room, we see vulnerabilities: cyber risks, single points of failure and geopolitical tensions that can cascade across borders.

In short, inside our monetary high-rise we see three trends:

declining everyday use of the staircase–cash at the point of sale;

continued demand for a place in the building–cash as a store of value;

and increasing reliance on the elevator system–private digital payments.

These shifts bring new forms of convenience and speed, but also greater concentration and fragility. This raises a crucial question for central banks: how do we keep the building safe, inclusive and resilient—not only on sunny days, but when the lights flicker or the ground begins to shake?

We know from right here in Washington what shaking ground can do. In 2011, an earthquake damaged the Washington Monument and closed it for almost three years. It survived because it was carefully inspected, stabilised and restored. And for those inside when the quake struck, the instinct was clear: they did not wait for the elevator –they left the monument the old-fashioned way, by using the stairs.

This episode teaches something fundamental. In crisis, people reach for the most reliable exit –often the simplest, most time-tested option. Imagine a high-rise with no staircase at all: no matter how modern it looks, it would never feel safe.

The lesson is clear. Even the strongest landmarks are vulnerable to sudden shocks. Resilience is not a luxury; it is a necessity.

The same holds for our payment systems. We cannot rely on efficiency and routine maintenance alone. We must prepare for the unexpected –for crises, cyber threats and disruptions that can shake the very foundations of our monetary architecture. This brings us to a policy crossroads.

3 Choosing Our Priorities: Cost Efficiency, Resilience, Responsibility

As stewards of this monetary high‑rise, we are at a crossroads. The decline of cash at the point of sale is not a technical footnote but a strategic challenge. Do we stay passive and let the downward spiral continue, or do we reinforce the foundations to keep the building safe for all? Passivity would erode inclusiveness and resilience. Action needs conviction, investment and clear priorities. Is maximal cost efficiency still our North Star –or must stability and public responsibility come first? Don’t get me wrong. Cost efficiency matters: it keeps elevators running, lowers costs and supports innovation.

But it is not enough. When the ground shakes –geopolitics, crises, cyber threats –a firm footing is vital. Everyone –regardless of technology, geography or circumstance –must have safe, reliable ways to pay and store value.

Central banks carry a unique duty. We are not just regulators or operators; we are guardians of public confidence. That means looking beyond efficiency: investing in infrastructure, maintaining cash access, fostering innovation and safeguarding the emergency exits people rely on when elevators fail.

In the European Union and the Eurosystem, these choices are becoming concrete: designing a new public elevator –a digital euro –while reinforcing the staircase of cash.Let me outline how.

4 Strengthening Cash, Hardening Digital Payments

Even without a central bank digital currency, central banks have tools to counter the decline in cash and to strengthen resilience.

First, we must safeguard access to cash. That begins with transparency: monitoringATMs,bank branches and other cash services to identify regions or groups at risk of exclusion. It also means setting clear expectations and standards with legislators and industry so that basic access is maintained nationwide.

And we should support innovative distribution models such as cash-back at retail outlets, sharedATMnetworks and mobile cash services in rural areas. The objective is not to freeze today’s footprint but to ensure the shift toward digital payments does not leave parts of society behind. While we encourage new alternatives, this does not absolve credit institutions of their responsibility. Bank-based cash infrastructure is still the backbone of cash supply and must continue to support a resilient cash cycle.

Second, we should support the continued acceptance of cash –so the staircase is not only visible, but usable. That requires engagement with merchants, public service providers and payment firms to address costs, streamline cash handling and remove unnecessary barriers. We should also communicate the value of cash as a fundamental pillar of our payment system –its unique strengths cannot be matched or replaced by any other payment method. The aim is simple: cash should remain practical in everyday life.

Third, we need to modernise our own cash operations—maintaining the staircase efficiently. As cash transactions decline, unit costs tend to rise. Keeping cash viable requires greater efficiency – optimised logistics, automation, and data-driven processes.

At the Bundesbank, we are modernising and consolidating our cash infrastructure, closing underutilised branches and replacing ageing buildings with standardised cash centres in logistically favourable locations. The objective is clear: safeguard the long‑term supply of cash while raising efficiency and resilience.We are not abandoning the staircase; we are renovating and reinforcing it for decades to come.

Fourth, we must strengthen the resilience of digital payments – making the existing elevators safer. Oversight should ensure that critical infrastructures and providers maintain robust contingency plans, redundancy and strong cyber security. We should promote a diversity of payment options so that no single provider or technology becomes a single point of failure.

And we should foster offline‑capable solutions that can operate, at least for a time, without continuous connectivity. Failures can propagate quickly across borders; coordination and realistic stress testing are therefore essential. In this way, we reduce dependence on any one channel – including cash – while recognising cash as a unique resilience asset.

Fifth, we should provide a clear strategic framework for the future of cash and payments. Uncertainty about the long‑term role of cash accelerates the downward spiral: if banks and merchants assume cash will soon disappear, they underinvest and the prediction fulfils itself.

Central banks can counter this by articulating a long‑term vision: cash will remain available and usable, and digital payments will be promoted, but not at the expense of inclusion and resilience. We should engage stakeholders through consultations, working groups and public communication to build a shared understanding of objectives and trade‑offs.

In Germany, the National Cash Forum brings together all key actors in the cash cycle. It provides a permanent platform for dialogue between the central bank, credit institutions, cash-in-transit companies, retailers and other stakeholders to address operational risks, costs and future challenges. Together, we signal clearly: cash remains an important part of our payment landscape.

Finally, our instruments – regulation, operations and communication – must be aligned with that strategy. Central banks should not be passive observers of the evolving cash landscape. We must actively steward a payment ecosystem that is efficient, inclusive and resilient.

This is the spirit of theEU’s Legal Tender of Cash Regulation: strengthening cash’s role as legal tender and taking concrete measures to safeguard access and acceptance. The regulation ensures that citizens have the right to pay with cash wherever they go, and safeguards its broad acceptance by businesses and public authorities. By doing so, it protects the freedom of choice in payments and upholds financial inclusion for all members of society.

Ultimately, strengthening